Rocky Mountain Chocolate Factory Inc.

11/27/2024 | Press release | Distributed by Public on 11/27/2024 07:31

Material Agreement Form 8 K

Item 1.01
Entry into a Material Definitive Agreement.
On November 26, 2024, Rocky Mountain Chocolate Factory, Inc. (the "Company") entered into a letter agreement (the "Agreement") with Global Value Investment Corporation, certain of its affiliates (collectively, "GVIC"), and certain other parties signatory thereto.
The negotiation of the Agreement was overseen by an ad hoc committee of disinterested directors of the Company. Jeffrey R. Geygan, the Company's interim Chief Executive Officer, was not a member of that committee.
Among other things, the Agreement provides that:
●
GVIC will have the right to designate one individual to the Board of Directors (the "Board"), with such individual initially being Melvin Keating. GVIC has customary replacement rights if this individual is no longer serving on the Board.
●
The Company will cooperate in good faith with GVIC to mutually agree upon one additional individual to serve as an independent director on the Board. The Company and GVIC have agreed that such individual will initially be Al Harper. The Company and GVIC will cooperate in good faith on a mutually acceptable replacement if this individual is no longer serving on the Board.
●
For the period from the effective date of the Agreement continuing through the day that is 15 days prior to the deadline for submission of stockholder proposals for the Company's 2027 annual meeting of stockholders (the "Restricted Period"), the Board will have no more than seven members.
●
During the Restricted Period, GVIC will vote, subject to certain limited exceptions, its shares of the Company's common stock in favor of the election of each person nominated by the Board for election as a director, against any proposals or resolutions to remove a member of the Board, and in accordance with the recommendation of the Board on all other proposals or business.
●
During the Restricted Period, GVIC and certain other related persons will be subject to customary "standstill" provisions as set forth in the Agreement. The standstill provisions provide, among other things, that GVIC and such persons cannot, subject to certain exceptions provided in the Agreement:
o
initiate, propose, or otherwise solicit the Company's stockholders for the approval of any stockholder proposals, or cause or encourage the initiation or submissions of any such stockholder proposal;
o
seek, alone or in concert with others, representation on the Board, encourage others to nominate or propose members to the Board, or seek, alone or in concert with others, the removal of any member of the Board; or
o
increase their ownership of the Company's securities to an amount that would result in GVIC owning, controlling or otherwise having any beneficial or other ownership interest of more than 29.9 percent of the then-outstanding Voting Securities (as defined in the Agreement).
●
If at any time GVIC no longer beneficially owns shares of the Company's common stock representing in the aggregate more than 10 percent of the Company's common stock then-outstanding, then Mr. Keating will promptly offer to resign from the Board.
●
The parties agreed to customary non-disparagement provisions and mutual releases.
The foregoing summary of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 10.1 and is incorporated by reference.